CPS tells principals it lacks the cash to get through this year

Chicago Public Schools officials told principals on Wednesday that the district is "short of the necessary cash for the remainder of the school year," partly because of a pension payment of nearly $700 million due this summer.

Each of the district's geographic school networks was given a goal for how much to save. Principals and district officials said the money would have to come from holding back on purchases including textbook and technology acquisitions.

"Budget cuts and short-term borrowing have helped us make up for the funding gap, but to ensure we will have enough cash through year-end, we need to spend less and preserve more," CPS told principals in a presentation obtained by the Tribune.

On Wednesday, principals were told to hold off on $45 million budgeted for "non-personnel" expenses. The district said it wants to save another $10 million through a limit on new hires.

"In this fiscal crisis, please only fill jobs that are absolutely essential for students," CPS told principals. The district asked principals to consult with their supervisors before posting available jobs.

Chicago Public Schools canceled classes on March 25, Good Friday, as one of three furlough days that immediately prompted a renewed strike threat from the teachers union.

The other two furlough days for teachers and school-based workers are set for June 22 and 23, which were to have been professional...

CPS also said it would "better manage all available funds" by requiring district supervisors to approve purchases that exceed $5,000 and through changes on how employees are reimbursed for expenses. The district also said it plans to reset passwords used to approve purchases as part of an effort to crack down on fraud.

Three weeks ago, CPS CEO Forrest Claypool said the district had enough cash to get through the remaining academic year. The district on Wednesday said it would be in "a razor-thin cash position" until it received anticipated revenue from property taxes. District financial records have indicated there is just enough cash to make it through the year.

The district started its budget year with a $480 million gap that officials hoped to fill with help from the state. That money hasn't materialized, leading to the midyear cuts to school budgets and a $725 million bond issue. CPS also recently ordered three unpaid furlough days for all employees, which resulted in classes being canceled March 25.

CPS expected to save $65 million this year by eliminating the long-standing practice of paying the bulk of teachers' pension contributions. But with the teachers union threatening an April 1 strike, the district last week said it would continue the pension pickup until the end of a final phase of contract negotiations.

CPS is now in a similar spot as it was last year, when it had to scramble to make a $634 million payment to the Chicago Teachers' Pension Fund.

Pension fund officials said the district had paid slightly less than $8.9 million of its $688 million payment as of Wednesday, leaving a balance of $679 million. The district made no payments in January and February, fund officials said.

CPS spokeswoman Emily Bittner said Wednesday that the district had to be "as conservative as possible" with the cash it has.

"Principals' hard work has already prevented significant cuts to the classroom this year," Bittner said in a statement. "And their voluntary diligence in slowing spending for the remainder of the semester will balance our need to conserve limited resources while educating our children."

A version of this article appeared in print on March 10, 2016, in the News section of the Chicago Tribune with the headline "CPS: Not enough cash to end year - Principals told to hold off on `nonpersonnel' expenses, limit hires" —
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